IceCreamKid
With Great Power Comes Great Electricity Bill
EPIC CONTRIBUTOR
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Speedway Pass
This post by SteveO 7 years ago literally altered the direction of my life because it was the first time that I was exposed to a process that I knew could be replicated over and over again. It was the first thing that planted the seed in my mind that a regular guy like myself could one day become free. That's truly all I ever wanted. Freedom.
I actually never told him how much that post impacted me. I know of one other guy who got into real estate because of that post, but I'm sure there are others also who never spoke about it.
It's a story of planning, perseverance, guts, and grit. Process. Process. Process.
I did not have an understanding of what was needed to succeed for most of my life. The eye-opener for me was a subordinate at work. About 11 years ago, I was sitting down with him to talk about how to improve his work performance. He mentioned to me that he would quit if I took the fun out of his job.
The conversation quickly changed.
It turned out that he owned some apartment buildings and did not need his work income. I asked him numerous times over the next few months about how to get started. His answer was always the same, "Just go buy them". Not helpful but I got the idea.
I went to the local bookstore and purchased the book "How to Buy and Sell Apartment Buildings". It was full of all the information that I needed to get started. I would go home from work and work understanding demographics, pulling census data, digging deep into all the financials associated with apartments.
In 1997, I pulled the trigger!
My early life was not one that had any kind of direction. Our family moved a lot and I went to many different schools. My parents divorced when I was early in high school and our family was delegated to the welfare roles. My mother had fairly severe mental conditions and had no idea what any of children were doing. I ran wild and left high school after the 10th grade.
The future seemed so clear to me. I joined the Marines at the age of 17 which my parents were happy to sign for. My thoughts were focused on a big career in construction when I got out. The $6/hour on a jack hammer sounded good to me.
I did get a job as a landscaper and after a failed run at starting my own company, switched to plumbing. It seemed like a decent car was always out of my reach so I took a job as a mechanic in order to learn how to keep my own vehicle running.
I was married at the age of 19 and had my first daughter shortly after.
My mother-in-law worked at Hewlett-Packard and helped land me a job in the assembly department on the graveyard shift. The pay was half of what I made in construction but I viewed it as a better future. I started an education in the technical field so I could work up the ladder.
I eventually landed a job as a technician in the research and development department and then moved on to management. After 16 years of service at HP, my eyes were opened.
I still did my job but no longer put in extra hours. Nor did I give work my full attention anymore. I would get home and work on my plan for hours.
The plan was simple enough; determine the location that fit the criteria as outlined in the book that was poised for appreciation. I concluded at the time that my location in San Diego fit the profile!
My quest was frequently tempered as most of the agents that I talked to said that I wasn't ready. Lack of funds will give that impression.
I found an agent that said she wanted to work in the apartment field but had no experience. She offered that we could learn together.
I got a long list of 3-8 unit buildings together and ran all around the city looking. I found a nice 5 unit that was walking distance from the beach with an ocean view. My wife (now ex), would not come on board with the purchase and I had to let it go. I told her soon after that I was going to invest with, or without her. Soon after, I found a 4-plex in Carlsbad, CA. that fit my criteria. After a lengthy negotiation I purchased it for 180K with a 10% seller carryback on a note. In order to get the money I had to max out a credit line, and take a 3rd mortgage on my house.
Within a year I refinanced and paid off the credit line and 3rd. So I was basically had all my initial investment back. At year 2, I sold the property and exchanged it into another property with some other investors. I had 30% of a 46 unit property in Riverside, CA.
It was at this time that the plan for exiting my job came in to view. The plan was centered around how much money was needed to live on. The stock market was fairly high at this time and I had some money in my retirement account. I got a 21 unit property under contract in Palm Springs but needed to cash out my retirement to get it.
It only took 2.5 years of investing in apartments for me to exit my job for good. What a day that was. I walked in and looked at my BOSS and asked "How much time do you need to replace me?".
I stayed around until one week before the apartment deal closed.
I was now spending my days doing whatever was desired. My wife was still resistant to the whole idea but decided she wanted to quit her job too. We lived near the beach but decided to sell the home and move to Arizona. It was the only way we could reduce the expenses to a livable level.
I spent the next few years wheeling and dealing and refining my process. One of the biggest changes that I made was to start buying poor perfoming assets to get a better deal. This would frequently put us into negative cashflow situations although the networth was rising rapidly. All of this proved to be too much for my wife and we parted company. Although she had an extreme distaste for the apartments, she was happy to take half of them.
My process is still very similar in that I look for locations that are set to have improving apartment fundamentals and still look for the mismanaged properties. With the help of some great connections and aggressive moves on my part, I now have over 600 units. Each of my buildings are over 100 units in size as I feel that is the way to have some efficiency in management.
For many years, I would hire managers to work on the properties. This was a difficult undertaking and absorbed too much time. I now use professional management for everything and my quality of life has improved as a result. It has also allowed me to focus on the purchase and disposition side of the business.
I am married again and my wife is a real estate contract attorney.
We actually work together on deals at this point. It really helps to have a supportive spouse that is in allignment with your objectives.
My networth is approaching the big 10M. Most of the cashflow still ends up back into new deals (it is a disease
).
I have been on RE forums for a number of years giving advice freely. My objectives are not as noble as that sounds though. I have made many connections as a result and have helped myself and others to profit nicely. It is a good trade off for me.
I have recently begun putting investor money into deals with a strong team of professionals at the helm. It is a great opportunity to leverage off of years of experience.
In summary, It took a lot of years to get on the right road. I wish that I had started a lot sooner. The saving grace was having a plan and process for success. I am sometimes amazed with the slowlane approach that many people take without looking deep into the future, especially with all the information that is before them. Or, the fact that they are willing to settle for retirement with a few houses to rent. Planning....
I actually never told him how much that post impacted me. I know of one other guy who got into real estate because of that post, but I'm sure there are others also who never spoke about it.
It's a story of planning, perseverance, guts, and grit. Process. Process. Process.
I did not have an understanding of what was needed to succeed for most of my life. The eye-opener for me was a subordinate at work. About 11 years ago, I was sitting down with him to talk about how to improve his work performance. He mentioned to me that he would quit if I took the fun out of his job.
The conversation quickly changed.
It turned out that he owned some apartment buildings and did not need his work income. I asked him numerous times over the next few months about how to get started. His answer was always the same, "Just go buy them". Not helpful but I got the idea.
I went to the local bookstore and purchased the book "How to Buy and Sell Apartment Buildings". It was full of all the information that I needed to get started. I would go home from work and work understanding demographics, pulling census data, digging deep into all the financials associated with apartments.
In 1997, I pulled the trigger!
My early life was not one that had any kind of direction. Our family moved a lot and I went to many different schools. My parents divorced when I was early in high school and our family was delegated to the welfare roles. My mother had fairly severe mental conditions and had no idea what any of children were doing. I ran wild and left high school after the 10th grade.
The future seemed so clear to me. I joined the Marines at the age of 17 which my parents were happy to sign for. My thoughts were focused on a big career in construction when I got out. The $6/hour on a jack hammer sounded good to me.
I did get a job as a landscaper and after a failed run at starting my own company, switched to plumbing. It seemed like a decent car was always out of my reach so I took a job as a mechanic in order to learn how to keep my own vehicle running.
I was married at the age of 19 and had my first daughter shortly after.
I eventually landed a job as a technician in the research and development department and then moved on to management. After 16 years of service at HP, my eyes were opened.
I still did my job but no longer put in extra hours. Nor did I give work my full attention anymore. I would get home and work on my plan for hours.
The plan was simple enough; determine the location that fit the criteria as outlined in the book that was poised for appreciation. I concluded at the time that my location in San Diego fit the profile!
My quest was frequently tempered as most of the agents that I talked to said that I wasn't ready. Lack of funds will give that impression.
I found an agent that said she wanted to work in the apartment field but had no experience. She offered that we could learn together.
I got a long list of 3-8 unit buildings together and ran all around the city looking. I found a nice 5 unit that was walking distance from the beach with an ocean view. My wife (now ex), would not come on board with the purchase and I had to let it go. I told her soon after that I was going to invest with, or without her. Soon after, I found a 4-plex in Carlsbad, CA. that fit my criteria. After a lengthy negotiation I purchased it for 180K with a 10% seller carryback on a note. In order to get the money I had to max out a credit line, and take a 3rd mortgage on my house.
Within a year I refinanced and paid off the credit line and 3rd. So I was basically had all my initial investment back. At year 2, I sold the property and exchanged it into another property with some other investors. I had 30% of a 46 unit property in Riverside, CA.
It was at this time that the plan for exiting my job came in to view. The plan was centered around how much money was needed to live on. The stock market was fairly high at this time and I had some money in my retirement account. I got a 21 unit property under contract in Palm Springs but needed to cash out my retirement to get it.
It only took 2.5 years of investing in apartments for me to exit my job for good. What a day that was. I walked in and looked at my BOSS and asked "How much time do you need to replace me?".
I was now spending my days doing whatever was desired. My wife was still resistant to the whole idea but decided she wanted to quit her job too. We lived near the beach but decided to sell the home and move to Arizona. It was the only way we could reduce the expenses to a livable level.
I spent the next few years wheeling and dealing and refining my process. One of the biggest changes that I made was to start buying poor perfoming assets to get a better deal. This would frequently put us into negative cashflow situations although the networth was rising rapidly. All of this proved to be too much for my wife and we parted company. Although she had an extreme distaste for the apartments, she was happy to take half of them.
My process is still very similar in that I look for locations that are set to have improving apartment fundamentals and still look for the mismanaged properties. With the help of some great connections and aggressive moves on my part, I now have over 600 units. Each of my buildings are over 100 units in size as I feel that is the way to have some efficiency in management.
For many years, I would hire managers to work on the properties. This was a difficult undertaking and absorbed too much time. I now use professional management for everything and my quality of life has improved as a result. It has also allowed me to focus on the purchase and disposition side of the business.
I am married again and my wife is a real estate contract attorney.
My networth is approaching the big 10M. Most of the cashflow still ends up back into new deals (it is a disease
I have been on RE forums for a number of years giving advice freely. My objectives are not as noble as that sounds though. I have made many connections as a result and have helped myself and others to profit nicely. It is a good trade off for me.
In summary, It took a lot of years to get on the right road. I wish that I had started a lot sooner. The saving grace was having a plan and process for success. I am sometimes amazed with the slowlane approach that many people take without looking deep into the future, especially with all the information that is before them. Or, the fact that they are willing to settle for retirement with a few houses to rent. Planning....
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